Top Ten List Of Things From 2015 That Are Somehow Related To ERISA And My Practice
Like many, I took some time off over the holidays. Unlike many, who used the time to do fun things like go skiing, I used the time to sit down with three fingers of my favorite small batch craft brewery bourbon and write a top ten list for my blog. Here, without further ado, is my top ten list of things from 2015 that are somehow related to ERISA and my practice:
1. Favorite 2015 movie about ERISA and employee benefits: Concussion. Although not really about employee benefits and ERISA, its genesis is: see my series of blog posts on the NFL’s effort to avoid granting disability benefits to the great Steelers center, Mike Webster (here, here and here). The real story behind the NFL’s attempt to avoid responsibility for CTE and head injuries harkens back to the courage of Webster’s family and the talent of their lawyers, who took on the NFL and its constant stonewalling on the issue, and won.
2. Most enjoyable city I had never been to on a business trip before: I had an absolutely fascinating two day trip to Richmond for a deposition; what a great city. From the international cycling championship it was hosting while I was there, to the history of alligators in the lobby of the Jefferson Hotel, to the hip downtown neighborhoods with cobblestone streets, to the great meal I had at Lemaire, more was packed into a 30 hour stay than I could have imagined. As a civil war and colonial history buff, being able to squeeze in a walk around the Thomas Jefferson designed capitol (with great commentary from a park ranger I chatted with) and seeing the Jeb Stuart and Robert E. Lee monuments (on the advice of a helpful hotel concierge), the whole trip was a blast. Provoking the other side’s expert into answering a question at his deposition with the one word reply “Duh” just made the whole trip even more fun.
3. Best business meal (excluding meals with clients, so I don’t leave anyone out): Dinner at BLT Prime in New York, with two of my fellow speakers on a panel on fiduciary governance, Al Otto of Shepherd Kaplan and Peter Kelly, the Deputy General Counsel and Chief Employee Benefits Counsel of the Blue Cross Blue Shield Association. Great food and high level conversation that would only appeal, I have to admit, to an ERISA geek.
4. Most satisfying judicial decision (personal case load division): After approximately five years of litigation, including a week long jury trial, convincing the Pennsylvania Superior Court (for those of you not familiar with that state’s court system, the Superior Court is its intermediate appellate court) to not just reverse a $1.4 million verdict against my client, but to also enter judgment in favor of my client. Its one thing to win an appeal, but, as all trial and appellate lawyers know, its hard enough to flip a jury verdict on appeal, but to actually get a jury verdict reversed outright (in favor of entry of a JNOV) is a rare event indeed.
5. Most unsatisfying judicial decision (non-personal case load division): Tibble v. Edison, by the Supreme Court this past summer. As I discussed here, it rendered the whole appellate history of the case much ado about nothing from a jurisprudential perspective.
6. Most interesting ERISA decision that flew under the radar: Osberg v. Foot Locker, Inc., 2015 WL 5786523 (S.D.N.Y. Oct. 5, 2015), which attracted comparatively little discussion, given the depth of the Court’s analysis and that it was issued by one of the country’s most respected courts. What I liked most about it was that it emphasized the fact that plan communications are, contrary to what many believe, a central part of fiduciary responsibility. To quote the Court, “[t]he most important way in which the fiduciary complies with its duty of care is to provide accurate and complete written explanations of the benefits available to plan participants and beneficiaries.”
7. Best presentation I attended: A tie between two panels of magistrate judges, each discussing issues involving ERISA, discovery, spoliation and the amendments to the federal rules; the first was at ACI’s Chicago installment of its ERISA litigation conference in April 2015, and the second at ACI’s New York ERISA litigation conference in October 2015. At the former, I had asked the panel a question which led to a conversation afterwards with a magistrate judge from out west on the subject of spoliation and exactly the effect he believed the changes to federal rules would have on that issue. At the latter, a diverse group of judges held court (pun intended) on topics ranging from when discovery in benefit claims should be allowed to whether – and if so to what extent - the changes to the federal rules, despite all the effort put into them, would actually alter day to day discovery practice and litigation.
8. Best selfie (written version): Chris Carosa of Fiduciary News’ interview with me, which you can find here. Lot of fun, as Chris always has his finger on the pulse of the industry and thus both asks the important questions and elicits informative responses (and not just spin or marketing drivel).
10. Best Article I wish I had Written but That I am Not Funny Enough to Have Written: “Declarations: The Coverage Opinions Interview With The Grinch Who Stole Insurance - A Career Spent Denying Santa’s Claims.”
And with that, Happy New Year everyone.
My Exclusive Interview with Fiduciary News on ERISA Litigation
The good people at Fiduciary News gave me a soapbox, and I was happy to climb up on it. They interviewed me as part of their series of monthly interviews on ERISA and related topics, and I discussed ERISA litigation and a wide range of related issues. You can find the “Exclusive Interview: ERISA Attorney Stephen Rosenberg Says Litigation’s Legacy is Improved Plan Design” here. You will see I went on for a bit, as I am wont to do when anyone wants to talk about ERISA!
Me, Tibble, Pensions & Investments and Don Draper
With the Supreme Court hearing argument this month in Tibble, I thought I would pass along a link to this article in Pensions & Investments (registration may be required) on the case. Leaving aside (for the moment) the fact that I am quoted in the article, it is worth reading as a primer on the issues before the Court that are raised by the case. As the article makes plain, the case is not simply about the six year statute of limitations under ERISA, or about – as someone else quoted in the article notes – retail versus institutional share classes. Instead, it is a vehicle that could allow the Court to discuss many aspects of fiduciary duty in this context, and how they fit together with the statute of limitations. As such, the Court, if it uses the case in that way, could easily overturn a lot of apple carts, in much the same way that its discussion a few years ago in Amara, arguably in dicta and on an issue that was not expressly before the Court, upset a lot of assumptions about the scope of equitable relief under ERISA.
For my contribution to the article, I noted that:
“We need to clarify how the six-year statute runs,” said Stephen D. Rosenberg, of counsel at the Wagner Law Group, Boston. “The linchpin issue is whether a sponsor has a continuing duty. Do you have a continuing duty after six years?”
If the Supreme Court supports arguments by Edison 401(k) plan participants that fiduciaries can be held responsible beyond the six-year time limit, the ruling could encourage more fiduciary breach lawsuits, he said.
From a practical perspective, the answer to that question will impact plans in a number of ways, running from whether we will see a trickling off of class actions filed over excessive fees, to the costs of running such plans, to the level of diligence that plan sponsors and administrators will need to apply. All of these may vary depending on how the Court answers the question of when does the six year period start and end, and, perhaps more importantly, what events can start the six year period running again.
In some ways, to steal a line from an in-house benefits lawyer I know at a company with plans in place holding very large assets, it is almost like asking if you can sue Don Draper today for sexual harassment thirty years ago at Sterling Cooper. ERISA is no different than any other area of the law: there has to be a starting point and an ending point for the time period during which conduct can give rise to a suit. The multi-million dollar question posed by Tibble for the numerous plans out there is how do you determine those points in the context of investment decisions made by plans, where those investments may be held for many, many years.
Changing Firms, and a Brief Note on the Right of Service Providers to Make a Profit
So, some of you may have noticed a change on the masthead at the top of this blog, which notes that I am now at the Wagner Law Group , in its Boston office. It has been a pleasure litigating ERISA and business disputes for the past nearly quarter century at the McCormack Firm, but every now and then an old dog needs to do a new trick. More seriously, for the past several years, I have been increasingly called on by clients to assist with DOL investigations and to handle plan deficiencies and other problems, all outside of the litigation context. The Wagner Law Group, with its deep bench and broad expertise in all areas of ERISA governed benefit plans, gives me the opportunity to provide those services more extensively to my clients, while continuing my litigation practice, which is heavily oriented towards breach of fiduciary duty and other ERISA disputes. So not only was the timing right, but so is the fit.
If you want more information on my changing firms, you can find the press release on my joining the Wagner Law Firm here. When I read it myself for the first time, I immediately thought of a line a U.S. Senator I once heard speak liked to use immediately after being glowingly introduced, which was: “thanks for the kind introduction, which my father would have appreciated and my mother would have believed.”
With that out of the way, I wanted to turn to one brief, substantive discussion. Eric Berkman has a fine article out in Massachusetts Lawyers Weekly, in which he quotes me on the First Circuit’s decision in Merriman v. Unum Life, which rejected claims that a retained asset account structure for paying life insurance benefits under an ERISA governed plan violated ERISA. In one of my quotes, I explained that:
"The plaintiffs' bar is looking for ways defendants are making money or making these services profitable and calling them prohibited transactions or breaches of fiduciary duty," Rosenberg said. "But this case, which falls in line with cases in other contexts, is saying that as long as the plan beneficiary is getting everything he or she is supposed to be getting under the plan, it's OK that the insurance company or other service provider is also making a profit."
While there are a lot of technical issues to Merriman, I think this is the important takeaway if one is looking at the forest rather than the trees. Across the benefit industry, service providers have to turn a profit; if they don’t, we will quickly not have a benefit industry. The holdings in cases like Merriman, which found the payment structure appropriate even though it could create some additional profit for the insurer, drive home the point that, so long as there is no prohibited transaction or misuse of plan assets or other illegal behavior, its okay for service providers and insurers to turn a profit.
Can You Avoid Being Investigated by the Department of Labor?
I think pretty highly of the Department of Labor when it comes to ERISA governed plans, and feel they do a pretty good job across the board. That doesn’t mean, though, that you want to be investigated by them if you are a plan sponsor. It’s a little like being audited by the IRS – even if you didn’t do anything wrong and you don’t owe anything, it’s an experience you would rather avoid.
When it comes to 401(k) plans, there are a number of things that plan sponsors can do to avoid being the target of an investigation, and even more things they can do to make sure that, if they are investigated, the results are benign. I talk about them in detail in this article I am quoted in, “DOL Cracks Down on Employer 401(k) Issues,” on BenefitsPro.com.
Me, Massachusetts Lawyers Weekly and Gross v. Sun Life
Eric Berkman’s article in this week’s Massachusetts Lawyers Weekly on Gross v. Sun Life, in which I am quoted, does an excellent job of explaining the case, particularly to those readers who do not have years of experience with ERISA cases, benefit litigation, or the long history of the law in this circuit governing benefit cases. I have written before of my thoughts on the Court’s opinion in Gross, but I realized, in reading Eric’s article, that his questions when he interviewed me for his article were astute enough to draw out some additional thoughts on the case, which I had not yet thought of when I posted about the case on my blog.
Eric presents those additional ideas of mine very well in his article and, citing my own personal interpretation of the fair use doctrine, I thought I would pass them along here:
Stephen Rosenberg, a Boston ERISA lawyer who typically represents insurers and employers, described the case as a “natural culmination of years of judicial approach” in this circuit.
“Whether or not it’s shown up in decisions, there’s been a certain level of skepticism on how best to apply standards of review to medical evidence in these circumstances,” said Rosenberg, who practices with the McCormack Firm and was not involved in the case. “It was only a matter of time before they deviated from Brigham and established a higher bar for obtaining discretionary review. The court makes clear — as do other circuits — that they really want to see a clear statement that ‘we retain discretion’ to decide the issues.”
He also said the ruling extends beyond long-term disability insurance plans. In many contexts, the employer itself, rather than an insurer, provides an ERISA plan and wants to maintain discretion to determine benefits eligibility, Rosenberg explained.
“These plans are often written by an in-house benefits person or an in-house attorney who has no ERISA expertise,” Rosenberg said. “Years later, when a dispute arises, the company will always want to claim discretionary review, and I think they’ll have to learn from this decision that they need to use the proper language in these types of plans as well.”
A Belated Discovery and a New Blog to Recommend: ERISA Pundit
I am, for a change, flabbergasted and struck dumb: most people who know me will tell you I am seldom either. Luck, though, just landed me on ERISA Pundit, Warren von Schleicher’s well-written and insightful blog. Warren’s writing reminds me of a dirty, not really secret, secret about lawyers, especially litigators, which is that all lawyers think they are good writers, but very few demonstrate an actual foundation for that belief. Even a quick read of ERISAPundit makes clear that Warren isn’t among the latter; his writing brought a smile to my face on a cold January morning. If you haven’t read his blog yet, it is worth following this link.
I have to say, I had an amazingly busy 2012, but I still can’t believe I didn’t stumble across his blog until this morning.
Once Again, a LexisNexis Top Law Blog
Some fun news to pass on today, which is that this blog has been named a LexisNexis top law blog for the third year running. Although I have certainly never made a Shermanesque proclamation against doing so, I have never campaigned for votes in the various top blog competitions out there, which makes recognition of this nature even more satisfying. I write this blog for many reasons, not the least of which is my endless fascination with its subject matter, and I am pleased to see that others share that interest in the topics I write on here. My thanks to LexisNexis for the recognition, and to all of you who wrote in to LexisNexis with comments recommending my blog for this honor.
Interview in Fiduciary News
I have written before, on many occasions, about the evolving nature of fiduciary status, and in particular on the shifting regulatory landscape in this regard. Here is an interview I gave to Fiduciary News on the latest proposed Department of Labor regulatory change concerning the meaning of the word fiduciary in the ERISA context. If you want more background detail on that regulatory change itself, you can find it here.
The Envelope, Please . . .
Funny that I referenced the Oscar Awards the other day in a post, as I just found out this blog has been nominated as a top insurance blog by LexisNexis. You know how all the Oscar nominees who don’t win always say its an honor just to be nominated? I never believe them - I am in this to win!
Attorneys as Fiduciaries
Are you, or have you ever been, a fiduciary? Sometimes I am tempted to open a deposition with exactly that question, phrased as a derivation of the famous McCarthy era line. While I doubt I ever would do it, it’s the million dollar question in most breach of fiduciary duty litigation under ERISA. It is so often outcome determinative, that many cases go away after a ruling on that threshold issue (whether by dismissal if the answer is no, or settlement if the answer is yes), without anyone ever tackling the question of whether imprudent conduct that fell below the fiduciary standard of care ever actually occurred.
That’s a long lead in to this interesting article published by BNA, in which I am interviewed, on the role of attorneys and whether they can become fiduciaries to the benefit plans with which they work. Lawyers who are in essence working in the traditional role of outside advisors to plans and their sponsors really shouldn’t be deemed fiduciaries, but one can envision, at least in theory, an attorney crossing the line and taking on decision making authority that rightly belongs to plan fiduciaries in a manner that could give traction to a claim that the attorney was, in fact, a fiduciary.
On a side note, I know creating content isn’t cheap, so thanks are due to BNA for freely allowing me to republish the article here.
Fees, Me and BrightScope
This is fun - I am quoted in a nice article on BrightScope, which you can find here, reprinted on The Intelligent 401k Advisor blog (you can find the original article on Workforce.com, but you will have to register to get access to it).
Three for Thursday
I am going to catch up on a number of items I have meant to blog on this week, all in one fell swoop. So here goes:
• I posted before about my appearance in an article in the Boston Business Journal, but one that was only available on-line to subscribers. Here it is in another forum, openly available.
• I, and a cast of thousands, have been saying for some time now that the plaintiffs’ class action bar has wisely latched onto ERISA breach of fiduciary duty theories as an excellent replacement for bringing pure securities actions. As I have discussed in other posts, there are a variety of reasons for this, including easier discovery and possibly easier avenues to recovery. In addition, securities law in the area of what we in ERISA would call “stock drop” type litigation is much more well developed than it is under ERISA, leaving more room for tactical and theoretical maneuvering. Beyond that, the sort of backlash in public opinion, in Congress and in court decisions that existed - at least prior to the most recent market meltdown - with regard to securities class action litigation was non-existent with regard to framing the same types of cases under ERISA. Here’s a dog bites man story out of Business Insurance reporting on this phenomenon. Anyone who has been reading this blog or similar sources over the past few years already knows what the article is reporting, but it is still a nicely done introduction to the topic.
•And speaking of using ERISA for class action litigation, one of the central questions with regard to the increasing use of that statute to press stock drop litigation and its cousin, excessive fee litigation, has long been whether it is a successful tactic. The successful defense of the excessive fee claims in Hecker v. John Deere, in the Seventh Circuit, at an early procedural stage and prior to detailed discovery into the facts of the plans and the fees at issue, strongly suggested that ERISA claims of this nature may be no more likely to get past the procedural stage and into expensive litigation of the merits than a pure securities theory would be. The Supreme Court’s subsequent pronouncements in Iqbal seemed to confirm the approach taken by the Seventh Circuit in Hecker, of testing the legal viability of the underlying ERISA based theories before allowing the plaintiffs to conduct discovery that might more strongly establish the legitimacy of their claims (or lack thereof, for that matter). As many have been reporting, the Eighth Circuit has just essentially taken the opposite tack, in a putative class action case against Wal-Mart, Braden v. Wal-Mart Stores. Braden can be understood, in part, as rejecting the approach taken by the Hecker court and finding that discovery is necessary before the merits of a complex excessive fees type claim can be decided. For more detail on Braden, here is Paul Secunda’s take on the matter over at the Workplace Prof (including a link to the case itself) and Roy Harmon’s take on the matter (which focuses nicely on the Rule 8 pleading requirements) at his always illuminating Health Plan Law blog. I have said before that with the increased focus on fees, the increased focus on the lack of retirement savings of most Americans, and the economic impact of high fees on returns in 401(k) plans, Hecker may turn out, in hindsight a few years down the road, to have been the high water mark for the corporate bar in defending against such claims. I am not sure whether that’s a good or a bad thing (I suspect, actually, that it’s a mix of both, but addressing that in depth here would make for an awfully long post), but it may well be the case either way.
Me and My Blog
Continuing last Friday’s line of digression away from the actual subjects of this blog, I thought I would pass along that I am featured in an article in the current edition of the Boston Business Journal, on the subject of legal blogs. Here’s a link to the article, although you need to be a subscriber to access the rest of the article (including the rest of the quotes from me and a smiling picture of my handsome visage).
Commenting on Commenting
A Top 50 Blog? I Always Thought So
During the Olympics, I read an interview with someone who said he just wanted to be the Michael Phelps of something, anything at all. While my aspirations may not run quite that unrealistically high, its certainly fun to be recognized as one of the top 50 of anything. LexisNexis has announced its list of the Top 50 insurance related blogs in the country, and -insert self-congratulatory pat on the back here- this blog is one of them. You can find the whole list here.
Gone Fishing - Not Really
Permalink | I am starting a trial today, so my posting will be sporadic and erratic at best. As I did the last time I was trying a case, I will try to at least find time to pass along new court decisions, publications, or events of significance while I am on trial, even if I don’t comment much on them in the posts; if they warrant it, I will return to the posts later to discuss the issues in more detail.
Passing Along an Interesting Blog: Number One
Permalink | One interesting thing about the LaRue case is the amount of blog commentary it inspired. For me personally, the best aspect of that wasn’t so much what other bloggers had to say about the subject, but more the fact that the discussions brought some blogs to my attention that I had not previously been aware of. I thought I would pass along two of the more interesting ones to you, as they may be of interest to people who come here to read up on the ERISA and retirement benefit issues discussed in this blog.
The first is The Float, published by Interlake Capital Management. The Float is mostly focused on financial news related to 401(k) plans and the like, but is somewhat unique in that it blends discussion of those economic issues - as well as just plain old fashioned business media bashing - with intelligent comments on breaking legal issues affecting such plans, such as the LaRue decision. It’s a lot of fun to read, not the least of which is because you don’t need a Wall Street background to enjoy their financial commentary, just some interest in and experience with the subject.
I’ll pass the second blog along in my next post.
The Governance of Retirement Plans in the Aftermath of the Subprime Meltdown
Permalink | Fellow blogger Susan Mangiero and I are quoted extensively in a very interesting article, available here, in the January issue of the Institutional Real Estate Letter. The article, titled Investing in Good Governance, focuses on one of - if not the only - potential silver linings in the whole subprime mortgage mess, namely the possibility that it will help to focus pension plan fiduciaries on the fiduciary obligations, particularly as related to protecting plan assets from ill advised and ill informed investments, that they owe to the plan itself and to plan participants.
SmartMoney on the Practicalities of Complying With ERISA
Permalink | This is a law oriented blog, obviously, and one of the things that is always worth remembering is that the complicated legal issues played out in the cases discussed here have real world implications for plan participants and for businesses trying to provide benefits to their employees. A nice reminder of that is here, in this article on SmartMoney.com, in which I and others are quoted on the question of how business owners should operate 401(k) plans in light of the potential for fiduciary liability being imposed under ERISA.
Looking Under the Hood of Pension Plan Investments
Permalink | Word comes to me today from Susan Mangiero, who pens the Pension Risk Matters blog (that phrase reminds me just a little of one of my favorite move phrases of all time, “a lot of alliteration from anxious anchors”), that I am quoted in an interesting article by Liz Peek in the New York Sun today, titled “Pension Fund Litigation Could Slow Investments.” The gist of the article? That there is a lot of hidden risk in pension assets that fiduciaries and plan sponsors aren’t fully cognizant of, and that this reality is placing fiduciaries at risk of litigation. The article, relying on data from Susan’s new company that tracks pension related litigation, points out the swelling numbers of lawsuits being filed over this issue.
A Top Blog at the LexisNexis Insurance Law Center
Permalink | Some years back, I was on a job interview when I was asked a question by a senior partner in a fairly good sized firm. When I began my answer with the comment that I was loathe to brag, he interrupted me to say that it was a job interview, so if there was ever a time when it was appropriate to brag, it was then. Not bad advice, in hindsight. In much the same way and with the same sort of license, I thought I would mention that this blog has been included by the people at LexisNexis on its list of top blogs at its Insurance Law Center, which I can recommend to you as a good place to locate cases, commentary and timely information on insurance related issues. I am told that “the selection of [the Boston ERISA and Insurance Litigation] blog was made by insurance editors at Matthew Bender and LexisNexis Mealey's Insurance publications as one that can be relied upon to provide its readers with timely review and analysis on insurance and insurance related topics.” Well, we try to, anyways.
Either way, modesty - false or not - aside, I appreciate the recognition, and hope the readers of this blog find some more of the information they are looking for at the LexisNexis insurance law center.
Scott Turow on the Billable Hour
Permalink | I’m really veering off topic here on today’s post, although I have in the past managed to post about the billable hour system and link it to the question of how policyholders should pay their lawyers in insurance coverage disputes. Today, though, I won’t even rely on that fig leaf, preferring instead to just pass along an excellent article on an issue that both every lawyer and every client who reads this blog has given at least some thought to - the inherent problems of the billable hour. I have talked before on occasion about issues related to the billable hour, such as in this post, and this is a very common subject of discussion for legal bloggers - to the point where one even has a law firm whose business model rests primarily on its abolishment. Scott Turow, who has been the most successful of an entire generation of lawyer/fiction writers at combining practicing law at a high level with writing at the same level (I’m not going to debate here the literary values of John Grisham’s novels in comparison, but will note only that he gave up practicing for all intents and purposes when the book sales took off) has this excellent piece in the ABA Journal about the billable hour and his discomfort with it.
One thing I liked in particular about it was that, despite laying out - as all critics of the system do - his criticisms of the billable hour system, he notes that marketplace forces place some checks on its possible abuse. To me this goes directly to an important point that I think, as a regular reader of critical analyses of client billing, gets overlooked in many articles complaining about the billable hour: namely, that clients are more interested in whether they receive value for their dollar than they are in the particularities of how they are billed, whether by the hour or in an alternative method. Like all of us, they want to pay the right price for the right services, something pointed out in the anecdotes in this companion piece right here from the same issue of the ABA Journal. There’s nothing inherent in the billable hour model that prevents that, and that, combined with the fact that most lawyers do actually manage to bring about fair pricing despite the use of that billing system, is, more than any other reason, why it is still here with us.
Me and LaRue, and Business Insurance Too
Permalink | There is an article in Business Insurance magazine this week, the June 25th issue, on the Supreme Court accepting review of the LaRue decision, in which I am quoted. The article is here - subscription required - and if you read it, you will note that it ends on my comment that I expect the Supreme Court to overturn the Fourth Circuit. A short article intended really just as a little news blurb on the subject for the benefit of the magazine’s business management oriented readership, the reporter did not have the space to go into why I think the Court will overturn the lower court decision, but I, obviously, have the space to do so here. So to the extent anyone is interested in the question, here’s my thinking.
First, I don’t really expect the Court to do much, if anything, with the question of the scope of equitable remedies issue. If anything, given the language of the statute, despite the fact that many people want the Court to expand individual remedies and available damages under ERISA - including, I have found in my litigation practice, many District Court judges who are displeased with the limitations of the statute but nonetheless consider themselves duty bound to enforce its restrictions on recovery - the Court has probably read the range of equitable relief that can be pursued in as broad and pro-plaintiff a manner as the language allows, with its test of whether the relief sought would be equitable or not way back in the days of the divided bench. There simply isn’t much more you can do with the statute’s restriction of recovery in certain circumstances to equitable relief unless you are simply going to ignore the actual language of the statute and rewrite it by judicial fiat, which this Court certainly isn’t going to do and arguably, the thinking of Ronald Dworkin and his heirs aside, no court should do.
In a way, this issue is a perfect parallel to a long running and common problem in the insurance coverage field, in which there was an oft litigated dispute over whether insurance policies, because they only cover claims for damages, cover lawsuits seeking equitable relief, the issue being that the policies only cover damages and equitable relief is something different than damages. In both insurance coverage and ERISA cases - such as LaRue - the simple fact of the matter is that equitable relief does mean something particular, something that is different than a claim for damages, and the question is what is the impact of that difference.
Second, with regard to the more fundamental question of whether the individual plan participant could recover just for losses to his account in the plan, yes, I do think the Court will overrule the Fourth Circuit and find that such an individual plan participant can bring such an action. I can never recall whether the saying is that the Court follows the election returns, or is that the Court doesn’t follow the election returns, so I looked it up, and in fact the saying is that they follow the returns, although every author who writes this then adds qualifiers to the comment, such as in this piece here. Either way, the kind of relief sought by the plaintiff in the LaRue case, to be able to enforce his investment instructions in his own retirement savings account, clearly fits with the current Zeitgeist and, more interestingly, is of a piece - and a natural fit with - the changes to retirement savings plans put into place by the Pension Protection Act. Beyond that, the statutory language that is at issue in this part of the case is completely open to either the interpretation selected by the Fourth Circuit, or that sought by the plaintiff, and thus the Court can realign this part of ERISA without doing any violence to the statutory language. Combine these things, and I get a reversal.
More Recommended Reading: The Cavalcade of Risk
Permalink | The Cavalcade of Risk: 1st Anniversary Edition, is now up at Insure Blog. Noting that “it was a year ago this week that we published the first Cav,” Insure Blog explains that the Cav is intended as a round up “of interesting/unusual risk-related posts from around the blogosphere.” One of my posts is up on the Cavalcade, but perhaps of more interest to those of you who already read my posts, so are a number of other, interesting posts on insurance, employee benefit, and pension issues from some of my favorite bloggers. I recommend you take a quick gander, and hope you enjoy it.
Some Recommended Reading
Permalink | If there were a Pulitzer prize for blogging, this would get it. For those who have read the book Flags of our Fathers, or the millions more who have seen the movie, this post reminds us that the war in the pacific was made up of exactly those types of personal stories, only writ large over countless thousands more.
Still More on Structural Conflicts of Interest
Permalink | Day 3 of my discussion of the First Circuit’s recent ruling concerning structural conflicts of interest and their impact on claims for benefits under ERISA: Workplace Prof blog has his take, and quotes from others, here, and one of my favorite, quirkier, law blogs, Appellate Law & Practice, has its take here.
Three Out of Three Commentators Agree: Law Reviews Have Made Themselves Irrelevant
Well, I don’t know. Did I hit on something that was already percolating in the zeitgeist a few weeks ago when I addressed the increasing irrelevancy of law reviews in a post, or does someone at the New York Times read my blog? You will recall that, after having, as David Rossmiller pointed out, eaten my Wheaties before sitting down after breakfast to fire salvos at the law review/law school industrial complex, I had pointed out that law reviews have simply made themselves irrelevant to the practicing bar and the judiciary.
Echoing the themes of my earlier post, The Times today declares in a piece entitled “When Rendering Decisions, Judges Are Finding Law Reviews Irrelevant” (which you have to become an online subscriber to get access to) that “articles in law reviews have become more obscure in recent decades and the legal academy has become much less influential.”
I am pretty sure that’s what I just said, in my not too long ago post on the subject.
The Wall Street Journal Law Blog chimes in on the topic today as well, declaring that “Judges Are Ignoring Law Review Articles” and commenting on the Times article.
I don’t know, but maybe everybody who managed to get through law school pretty much knows this little secret about the overwhelming majority of law review articles, that they really add no value to the legal community and are written simply because they are the coin of the realm for advancing law careers. Frankly, the last time I can remember coming across a law review article that was relevant to the judiciary’s and the bar’s development of a particular cutting edge point of law was twenty something years ago, when a Columbia law student published an influential note on the subject of the essential facilities doctrine in antitrust law. To my recollection - this was something I last worked on in the 1980s - the article was regularly cited by courts presented with that then novel theory as authority summing up what the elements of a cause of action under that theory are if in fact the theory is even operative. In all the years since, I can’t recall a law review article that played a central part in the development of any particular line of jurisprudence. And if law review articles are not playing a central role in that development, then should we really be cutting down trees to publish them?
Law Reviews Are Dead, They Just Don't Know It Yet
Permalink | Kevin O’Keefe, the trial lawyer turned legal blogging evangelist who runs LexBlog, the company that provides the technical support - but not any of the copy - for this blog and for the many other blogs listed on the lower left hand corner of this page, has been running a series of posts on the question of the impact of legal blogs on law reviews. I have my own thoughts, based on years of practice and my own stint on a review’s editorial board, on the question of what the growth of legal blogging means for the future of these august but hide bound publications. Now I try to stay away from blogging about blogging - in fact I think I have managed to blog for many months now without ever discussing the subject in a post - because I think it’s essentially navel gazing and it has nothing to do with the reason why people come to this blog, which - I hope not naively - I assume to be to learn about ERISA, intellectual property litigation and the law of insurance coverage. But I couldn’t let the subject raised by Kevin (who, by the way, has no compulsion against blogging about the topic of blogging because, well, that is what his blog is about - blogging) pass without commenting on it from the standpoint of a practicing litigator who focuses on the areas discussed in this blog.
When I came across Kevin’s posts on this topic, the old song lyric that video killed the radio star immediately started sounding in my ears, and no, I wasn’t listening to my ipod at the time. Law blogging is in the early stages of making detailed legal analysis on specific subject areas available to the entire legal community in ways that are both searchable and far more practical and useful than anything that law reviews generally provide. There is little doubt in my mind that practicing lawyers can find far more useful information about specific issues in insurance coverage, for instance, from David Rossmiller’s blog, or on the law of ERISA from Roy Harmon’s blog, or on intellectual property issues from Patently O, and so on and on, then they will ever locate in the published law reviews.
And why is this? There are multiple reasons. First, at the risk of being too negative, law reviews have, over the years, essentially become echo chambers for law faculty to talk to one another or, worse yet, have simply become a place for law professors to publish esoteric work that is absent significance to practicing lawyers or the courts simply because they feel they need to do so if they are to pursue tenure. This is hardly a novel criticism, as I can remember a federal judge - I forget who it was, but he was out of the industrial mid-west - pointing out years ago that published legal scholarship had no merit or relevance to what he did every day. Law blogs are obviously different; the point is to publish useful legal information at a level of legal sophistication sufficient to be relevant to the practicing community, the courts and clients. That is an entirely different audience than the one that law reviews are targeted at, and an entirely different type of information that is intended to be transmitted.
In fact, when I was in law school, a particular near octogenarian law professor, rumored to have been during his earlier days at Harvard the model for Professor Kingsfield in the book and movie The Paper Chase, spoke once about how, many years ago, the writing of treatises that were of practical use to the profession was considered a worthy output for a law professor, but how that was no longer the case. Instead, esoteric topics, the more so the better, were what advanced a career in legal scholarship.
Second, blogs are searchable in a matter of moments. Run a search for ERISA, for instance, over at Google Blog Search, and see how quickly you can find information about the differing approaches to the standard of review in ERISA cases when the administrator is operating under a conflict of interest, a favorite topic of this blog. Then compare that to how quickly you can actually find law review articles on this subject, with the exception of those pieces commented on and linked to in blog posts. I know that those articles are out there, because I have read many of them, but you won’t find them quickly, or without doing traditional types of legal research to locate them.
Third, law reviews have divorced themselves from the practicing lawyer, in multiple ways, only one of which I will comment on here, so as to avoid turning this blog post into, well, the length of a law review article. They make publication too time consuming for many successful lawyers to consider pursuing, thereby limiting the pool of potential author/experts - perhaps intentionally? - to law faculty. I have on my own hard drive, for instance, a nearly finished law review article covering the law of trade dress infringement in the First Circuit that grew out of a summary judgment memorandum in a trade dress infringement case I was litigating. The substance is all there, but finding the time to fix the cites, and dress up some of the transitions, and dot each I and cross each T? Almost impossible, unless I am going to assign it to an associate, which somehow strikes me as cheating. But what I may well do is finish it up to a nearly finished draft status, and put it up on this blog, and just plain bypass the time consuming law review publication system, while still putting the information easily in the hands of those who may have use for it. Blogs make all of this type of information far more readily available to the community than law reviews do or, frankly ever will, unless and until they not only add accompanying blogs but also make all of their text freely available for on-line searching.
So yes, whether you practice in ERISA, insurance coverage, intellectual property, or any of an endless variety of other practice areas, legal blogs are far and away the best source of information, and they are turning law reviews into dinosaurs. The whole subject reminds me of some discussions in Seth Godin’s book small is the new big that can essentially be summed up as, in the age of the internet, businesses can either change or die. As far as I am concerned, that is where law reviews find themselves right now: they can either figure out how to transform themselves into an easily accessible on-line repository of valued information, or they can continue to be marginalized, only at ever increasing speed, into a place where law professors simply go to impress one another.
I should probably take a page from my elders at this blogging business, and create a blogroll on the links section on my blog listing the blogs I read regularly and that are good resources on issues addressed by this blog. For now though, I continue with my Logrolling entries to record that information. And with that in mind, I wanted to note that Susan Mangiero, at her blog Pension Risk Matters, has a terrific synthesis of recent posts and other work, including mine, on the question of unreasonably high 401(k) fees and the possibility that they can support a breach of fiduciary duty claim under ERISA. Beyond that, I am a regular reader of Susan's work, which covers issues involving pension management and governance, and can recommend it to others who may have an interest in the subject.
Where do I get my information and how do I stay up to date? From sources like BNA's new pension and benefits blog, hosted right now by Nell Hennessy, who has the experience to really discuss pension issues. She has a nice post up right now listing blogs, including this one, that cover ERISA, pension and benefit issues, and it is a nice handy cheat sheet of sources of information on the topics covered by this blog. I haven't read all of the blogs Nell noted, but I have read many of them, and they are the cream of the blogging crop on these issues.
Oh, and by the way, I am dimly aware that some use the term blogrolling to refer to bloggers talking about other bloggers. I do, however, prefer the more classic American political term logrolling, with all of its historical connotations.
Retirement Benefits and Fiduciary Duties under ERISA
There is a nice and complimentary write up of this blog at Workplace Prof Blog, one of my favorite sources for a wide range of information related to employee benefits, including ERISA, such as this post on a petition for writ of certiorari arising out of a recent Ninth Circuit ruling concerning the fiduciary obligations of the administrator of an employee deferred profit sharing plan. The petition is itself interesting reading, and is available here (thanks to the efforts of the Workplace Prof), and details what the petitioner views as a split among the circuits on two specific points concerning the law of ERISA. The first is whether a plan participant can sue a fiduciary for breaches of fiduciary duty that harmed only a subset of a plan's participants and not the plan as a whole, while the second concerns the extent to which the administrator of a retirement plan can follow, or instead must decline to follow, a plan sponsor's directive that is not prudent from an investment perspective.
Tough choices that these types of cases present, as to where to draw the line between the sponsor's right to operate its plan and the protection that should be extended to the participants. Perhaps the question of whether the participant can protect herself within the structure of the plan, seperate from what the administrator or sponsor does, might act as a guide post on where that line should be drawn.
David Rossmiller, one of the pioneers, along with Marc Mayerson, of insurance coverage blogging, has kind words to say about the Boston ERISA and Insurance Litigation Blog here and again here. I can, in turn, commend David's Insurance Coverage Law Blog to those of you who, like me, are always looking for more to read on the law of insurance and insurance coverage. Every week David has at least two or three posts that I could happily borrow from/riff about on this blog, and only a little self-discipline prevents me from relying so heavily on his work.
Beyond that, a quick survey of David's posts always uncovers something that lawyers who practice in this area can borrow to use in their own cases. I can ensure you, for instance, that it won't be long before one of my briefs accuses an adversary of mounting the "Big Rock Candy Mountain" defense.